4 Signs the Dollar/Yen Momentum Could Slow

The U.S. dollar has been surging since the election, but the currency may be set to cool in the near term

Senior Vice President of Research
Nov 22, 2016 at 3:33 PM
facebook X logo linkedin

Following Donald Trump's election win earlier this month, the U.S. dollar has surged alongside the broader domestic equity market. In fact, the U.S. Dollar Index (DXY) is still perched atop the closely watched $100 level. However, a closer look suggests the Dollar/Yen momentum could slow down in the days ahead. Below are four things we're watching on this forex front.

Dollar Yen Overbought Nov 22 __

1. For starters, the Dollar/Yen has officially been overbought, according to its 14-day Relative Strength Index (RSI) of 80.3. As you can see from the orange portion of the chart above, this reading has not spent much time above 70 in recent years. This alone suggests the currency may be due for a breather.

2. But the 320-day moving average is also bearing down at the moment. This trendline marked a peak earlier in the year. Looking back to July 2014, a consolidation into this trendline preceded the next leg higher from the round $100 area, into June 2015.  

3. Also looming overhead is the $113.04 region, which is roughly 10% below the June 2015 peak.

4. On a year-over-year basis, the Dollar/Yen is now approaching the round negative 10% area, another potential technical roadblock.

While the aforementioned levels may not suggest widespread selling at this juncture, they could suggest the momentum off the lows will slow as profit-takers offset a recent rush of buyers. Downside could be limited, however, with the round $110 level  -- 10% above the recent low -- just below.

Let us help you profit from market volatility. Target big gains in short order with a 30-day trial of Schaeffer's Weekly Volatility Trader!

Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls



Rainmaker Ads CGI